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Eric Bloch Column

Don’t give us facts, give us scapegoats

mes New Roman’; mso-fareast-language: JA”>By Eric Bloch

COMPLETELY out of character with its administration of Zimbabwe’s non-economic affairs, government has demonstrated a remarkable consistency in justifying the country’s economic ills. It has evidenced an astounding ability to disregard or deny facts and realities, matched by a constant capacity to ascribe those ills to causes other than its own acts of omission and commission.

From 1982 to 1988, anything that was wrong within the economy was alleged by government to be due to the conduct of the pre-Independence “colonial regime” which, it contended, had created an unconducive economic environment. However, by 1988 that contention ceased to have credibility, for questions were rightly being asked as to why, if it had substance, government had not implemented remedial policies. So from 1988 to 1991 government claimed that the desolate economic circumstances were due to destabilisation by the evil apartheid regime in South Africa.

As the transition to the “new South Africa” commenced, some alternative target for blame was necessary, and readily presented itself. The continuance of economic decline was, according to government, attributable to drought and its repercussions. It cannot be denied that adverse climatic conditions had a negative impact upon the economy, but only to a contributory extent. The underlying problems continuing to be government created. Then government had a brief reprieve for it reluctantly and belatedly began implementing the 1991 Economic Structural Adjustment Programme (Esap) and the economy began to enjoy an upturn.

Regrettably, that was short-lived for, on the one hand, some essential elements of Esap were abhorrent to government and, therefore, not implemented (such as curbing state expenditure and containing corruption) and, on the other hand, it was determined to pursue ideological and political objectives irrespective of their destructive economic effects. Those objectives were pursued with ill-considered, disastrous effects, and at the forefront of the modalities of seeking to fulfil the objectives were a counterproductive and highly destructive land reform programme and provision of a compensation package to war veterans, real and pseudo, in amounts way beyond the state’s means. The economic gains of the preceding three years were rapidly reversed and the economy set upon a slope of fast downward direction.

Over the ensuing six years, numerous factors beyond government’s control were said by it to be behind the ever-intensifying economic morass. Foremost amongst the state’s alleged culprits were Western diplomats, various within the international community, whites, commercial farmers, “profiteering” industrialists and retailers, and the opposition party. Most recently, the prime focus for blame has been those perceived to be depriving Zimbabwe of critically needed foreign exchange and, in one speech after another, whether emanating from the president, the Minister of Fiction, Fable and Myth, and numerous others, the distressed state of the economy is stated to be almost wholly as a result of the lack of foreign exchange.

As the repetition of this allegation and “excuse” gained momentum, government realised that there would be a growing expectation amongst the populace for it to do something about it. So, last week, a foreign exchange taskforce was established to “address urgently the management of foreign currency”. Justifying its establishment, it was said that “the root cause of the obtaining economic problems was the unaccountability of foreign currency by exporters and other players”. What absolute, total hogwash!

The taskforce is a very high-powered one, comprising the Minister of Rural Resources and Water Development, Joyce Mujuru as its chairperson, the Minister of Finance and Economic Development, Herbert Murerwa, the Minister of State for Information and Publicity, Jonathan Moyo (what on earth does he know about foreign currency other than how to spend it?), the Minister of State for National Security, Nicholas Goche, the Minister of Industry and International Trade, Samuel Mumbengegwi, the Minister of Mines and Mining Development, Edward Chindori-Chininga, the Minister of Lands, Agriculture and Rural Resettlement, Joseph Made, the Minister of Environment and Tourism, Francis Nhema, and the Minister of Home Affairs, Kembo Mohadi. In other words, a taskforce of nine ministers charged with completing its task and reporting to the cabinet within three weeks.

That task is stated to include compilation of a data bank of all major exporting companies, examining foreign currency leakages and externalisation of funds by exporting companies, identifying ways and means of mobilising all gold from small-scale miners and panners, checking whether all banks and other authorised dealers are complying with exchange control requirements, and to devise watertight mechanisms of remitting foreign currency to the Reserve Bank. In addition, it is to recommend the best foreign currency allocation mechanism in accordance with national priorities, and to recommend an appropriate central exporting authority.

What a farce! How can any responsible body comprising persons with extensive other duties, carry out such a exercise meaningfully and thoroughly in such a constrained period, and how can government, in conceiving the taskforce, pre-empt its determinations by planning ahead for the establishment of a new regulatory authority (within an already over-regulated economy)? The answer is simple. Before the taskforce had already commenced its work, its findings were, to all intents and purposes, already decided.

This is apparent from the mouthings of an unnamed government spokesman, quoted in the state-controlled media as saying that “the root cause of the economic instability, characterised by relentless price increases and the shortage of such critical agricultural inputs as seed, fertiliser and diesel, was the unaccountability of foreign currency. All available evidence indicates that this economy is generating more foreign currency today than it did three years ago. But this foreign currency is being externalised and abused in the black market for reasons which are either political mischief or economic sabotage.”

Another source was quoted as saying that “in an economy which some analysts say grosses US$700 million a month from a combination of agriculture, mining, tourism and manufacturing products, the RBZ is said to be getting a paltry average of below US$5 million a month”. How detached from reality can anyone be! In contrast to their prognostications, most in the private sector are well aware of the circumstances fuelling the inadequacy of foreign exchange inflows. Far greater causes are, amongst many others:

*In less than three years, tobacco exports have fallen from 237 million kg to about 80 million kg, thanks to the destruction by government of the tobacco growing industry;

*Mining production has fallen, as rampant inflation has escalated operating costs to unsustainable levels for so long as government maintains a spurious currency exchange rate;

*Although government repeatedly claims that Zimbabwe’s tourism industry is enjoying increased patronage from non-Zimbabweans, this is not factually correct. Increased numbers of arrivals into Zimbabwe are not as a result of tourism growth, but due to thousands of “cross-border shoppers”, most of whom do not expend foreign currency but unlawfully obtained Zimbabwean dollars from illegal dealings in foreign exchange which would not, in any event, enter Zimbabwe;

*Zimbabwean politics and disregard for law and order, have turned Zimbabwe into an international pariah and, therefore, no longer a recipient of considerable foreign direct investment or of much of the international aid previously forthcoming;

lGovernment still expends, unnecessarily vast amounts of foreign exchange on maintaining unproductive embassies and trade missions in numerous countries;

lWhilst much foreign exchange does not enter the Reserve Bank’s coffers, it nevertheless is available to, and used by, the economy via the parallel market. Redirection to the Reserve Bank will not enhance the total foreign currency resource. These are but a few of very many facts, but government doesn’t want facts, it wants scapegoats!

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